Joshua D'Costa
Growth & Marketing
Jun 10, 2025
|
5
min
If you’re building a SaaS company in Nigeria, you know that tapping into global revenue streams isn’t as simple as clicking “Go Live.” Local startups face roadblocks around payment processing, tax compliance, and setting up operations beyond Lagos or Abuja.
Nigeria’s digital economy is projected to hit $20 billion by 2026, fueled by mobile-first consumers and a surge in fintech innovation. Yet, popular global gateways like Stripe and PayPal have only limited support for Nigerian merchants, Stripe only recently launched via Paystack, and PayPal still can’t receive payments locally.
On top of that, you must navigate Nigeria’s 7.5% VAT rules (with mandatory e-invoicing for larger firms), plus separate tax obligations in every new market you enter—from EU VAT to US sales tax. It’s enough to make any founder’s head spin.
Enter the Merchant of Record!
In this blog, we’ll dive into why Nigerian SaaS businesses struggle overseas, unpack the payment and tax hurdles you face, and how partnering with an MoR like Dodo Payments can turn global expansion from a headache into a growth accelerator.
Source: Wikipedia
What a Merchant of Record Does
A Merchant of Record (MoR) is an entity that sells your products or services in foreign markets. In practice, the MoR’s name appears on receipts and bank statements as the official seller
This means the MoR assumes all the legal and financial responsibilities of the sale. It processes the customer payment, collects any required taxes or duties, and remits them to the proper authorities.
For example, a good MoR will “stay abreast of local laws and regulations,” ensure each sale complies with regional tax rules, and handle the calculation, collection, and remittance of sales taxes on your behalf. Because the MoR handles payment processing, it also resolves refunds, chargebacks, and disputes.
Why Nigerian SaaS Businesses Can’t Ignore an MoR
Complex VAT and Tax Compliance
Nigeria’s 7.5% VAT requires tracking and filing returns on all eligible sales with mandatory e-invoicing for larger firms.
Selling abroad adds dozens of new VAT/GST regimes, each with its own registration thresholds, filing schedules, and tax codes that overwhelm small teams.
Payment Processing Roadblocks
Local gateways (Paystack, Flutterwave, Interswitch, Remita) excel domestically but don’t support major international cards and wallets.
Global platforms like PayPal can’t receive payments in Nigeria, and Stripe’s entry is limited, forcing startups to use costly intermediaries or manual FX conversions at poor rates.
Lean Teams, High Expansion Costs
Most startups lack in-house tax or legal experts to navigate multi-country regulations.
Setting up subsidiaries abroad (e.g., UK or US entities) entails hefty legal fees, foreign bank accounts, and ongoing accounting, often costing thousands of dollars.
A Merchant of Record removes these barriers by acting as the legal seller in each market, so you sell globally without setting up any foreign entities.
How an MoR Streamlines Growth
Automated Global Tax Handling
Automatically calculates and collects VAT/GST on each sale
Adds the correct tax at checkout and remits it to local authorities
Eliminates manual filing of foreign tax returns and avoids compliance fines
One Integration for Payment Methods
Supports credit cards, mobile wallets, bank transfers, BNPL, and more
Covers multiple currencies and local payment options
Removes checkout friction for international customers
Built-in Fraud & Risk Protection
Leverages AI-driven fraud detection in real time
Reduces chargebacks and manual risk management
Acts as a first line of defence against payment scams
No Need for Foreign Subsidiaries
MoR’s licensing covers all target markets
Avoids setting up overseas entities or bank accounts
You pay only the MoR’s fees and keep the rest of your revenue
Instant Global Footprint
Provides a localized, multi-currency checkout experience overnight
Handles all behind-the-scenes tasks (tax remittance, fraud checks, regulatory filings)
Enables you to launch in new countries with minimal effort
Selecting Your Merchant of Record
Look for an MoR with a broad global reach that offers support for dozens of countries and currencies, to ensure you can sell wherever your customers are.
Prioritize a localized checkout experience that adapts to regional languages, payment methods, and user preferences to boost conversion rates.
Verify comprehensive compliance coverage: the provider should automate VAT/GST/sales-tax calculations, filings, and remittances across all relevant jurisdictions.
Choose transparent pricing with clear transaction fees, no hidden charges for currency conversion, chargebacks, or compliance services, and options that scale with your growth.
Ensure the platform’s infrastructure and APIs can integrate seamlessly into your existing billing system, with the capacity to handle spikes in transaction volume.
Consider Dodo Payments, one of the first MoRs built for emerging-market SaaS in Africa and Asia, offering:
Payment acceptance in 150+ countries with >90% success rates
Partnerships with leading card networks and global wallets
Automated, worldwide tax calculation and remittance
AI-powered fraud detection and chargeback management
Local market expertise, including KYC, PCI-DSS Compliance, and tailored startup pricing
A Merchant of Record like Dodo Payments removes the need to build your own global payments and tax infrastructure, letting you focus on product development and customer acquisition.
Final Thoughts
Adopting a Merchant of Record can simplify the entire cross-border process.
With Dodo Payments as your Merchant of Record, you can conquer cross-border payments, tax obligations, and regulatory compliance in one fell swoop.
Our platform delivers seamless global transactions, dependable payouts, and fully automated tax handling, so you can focus on product innovation and customer growth.
If you’re a Nigerian founder eager to sell beyond Lagos or Abuja, exploring an MoR is the next logical step. Take your Nigerian SaaS business global by partnering with Dodo Payments today and unlock new markets.
